In This Article:
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Net Rental Income Growth: 8% increase to 76.7 million.
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Earnings Growth: 4% increase to 52.7 million.
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Rent Roll: Increased to 179.1 million.
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Dividend Increase: 4% increase, fully covered.
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Net Tangible Assets (NTA): Slight increase to 49.4 pence per share.
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Loan to Value (LTV): Currently at 49%, expected to reduce to 45% with asset disposals.
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Private Hospital Acquisition: 14 hospitals acquired for 500 million at a yield on cost of 5.9%.
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Debt Funding: 266 million term loan at a margin of 110 basis points, hedged at an all-in rate of around 5.2%.
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Cost Ratio: Maintained at 12%.
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Interest Rate: Average interest rate increased from 2.3% to 3%.
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Rent Cover: 2.3 times for the private hospital portfolio.
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Dividend Yield: Over 8%.
Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Assura PLC (ARSSF) achieved a significant milestone with the acquisition of a 500 million portfolio of private hospitals, enhancing its market position.
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The company reported an 8% growth in net rental income and a 4% increase in earnings, indicating strong financial performance.
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Assura PLC (ARSSF) successfully completed the first stage of its disposal program, selling 12 assets for 25 million at book value, which aids in optimizing its portfolio.
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The acquisition of private hospitals is expected to provide long-term secure and growing income through index-linked reviews, supporting a progressive dividend policy.
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Assura PLC (ARSSF) has diversified its revenue streams, with private hospitals now comprising 25% of its rent roll, reducing reliance on a single market.
Negative Points
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The NHS challenges have resulted in a 376 million pipeline of 33 GP-led schemes being put on hold, affecting potential growth in this segment.
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Assura PLC (ARSSF) faces a high loan-to-value ratio of 49%, although efforts are underway to reduce it to below 45% within 18 to 24 months.
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The company has seen a dilution in its NTA due to the issuance of shares, impacting shareholder value.
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There is uncertainty in the timing of rental growth from open market reviews, which could affect future income projections.
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Assura PLC (ARSSF) is experiencing cost pressures in its development pipeline, requiring a 30% increase in rents to make current projects viable.
Q & A Highlights
Q: What are your expectations for the upcoming 10-year review and any potential changes to the district valuer system? A: Jonathan Murphy, CEO, expressed confidence that the 10-year plan will include increased funding for primary care, driven by the need for more community-based treatment, which is cost-effective. While specific details are not yet available, there is optimism about infrastructure investment. Regarding the district valuer system, discussions are ongoing, and there is hope for progress in certain areas, though a blanket change is uncertain.